What size companies do private equity firms acquire?

Private equity firms do not share one size. Each firm sets a range for the companies it buys, usually measured in earnings (EBITDA), and the range follows the size of its fund. Smaller buyers exist: in 2025, private equity was the direct buyer in about one in 10 deals of $25 million or less upfront.

If you run a smaller company, you may wonder: what size companies do private equity firms acquire, and is yours big enough to get a call? The honest answer starts with how the market is measured, because the sources do not agree on one line.

What size companies do private equity firms acquire?

It depends on the firm, and the sources define the market differently. The International Business Brokers Association (IBBA) and M&A Source call deals of $2 million to $50 million in enterprise value the lower middle market, and deals under $2 million Main Street. SRS Acquiom, which acts as paying and escrow agent on private deals, defines lower middle-market deals as those with $50 million or less paid upfront.

SRS Acquiom's 2025 data shows how often private equity buys at that size. Private equity firms were the direct buyer in 11% of lower middle-market deals, and in about 10% of the smallest ones, those with $25 million or less upfront, up from 4% to 5% over the previous several years. Strategic buyers kept a strong position in the same deals. No single EBITDA minimum applies to private equity as a whole, because each firm sets and states its own, so find the range of any firm that contacts you before you read much into the call.

Does EBITDA or revenue matter more?

Earnings usually matter more than revenue to a buyer that is paying for cash flow. EBITDA (earnings before interest, taxes, depreciation, and amortization) is the usual measure, adjusted for the add-backs a buyer accepts, such as owner pay above or below market and one-time costs. For example, a company with $20 million in revenue and thin margins can look smaller to a buyer than one with $10 million in revenue and strong cash flow. Adjusted EBITDA is only as good as the records behind each add-back, and what institutional buyers expect lists what a buyer checks.

Is your business too small for private equity?

Not necessarily. A firm wants a company that fits its range, and the range differs by firm. Other buyers also look at smaller companies:

• Private equity firms with smaller funds, which set a lower range.
• Search funds, where investors back an entrepreneur's efforts to locate, acquire, manage, and grow a privately held company (Stanford Graduate School of Business).
• Independent sponsors and individual buyers, who often finance with a bank loan.
• Strategic buyers, such as a competitor, a supplier, or a customer.

Strategic vs financial buyers shows how these buyers differ on price, structure, and what happens to your team.

What else do firms check besides size?

Size gets you the first call. What follows is the same for any buyer: financials that tie to your tax returns, a company that runs without you, customers who are not concentrated in one or two names, and contracts and records that hold up in diligence. Two companies of the same size can draw different offers when one of them passes those checks easily. Exit optionality covers the work to start before you decide to sell.

What to do next

1. Calculate your adjusted EBITDA for the last two fiscal years and the last 12 months, and list each add-back with a document behind it.
2. Document how the number is built, and check whether a buyer's accountant would reach the same one.
3. When a firm contacts you, find the size range it states for itself, and ask why it reached out if you fall outside it.
4. Read how to qualify an M&A buyer before you share any numbers.

If you want help with steps 1 and 2, our M&A advisory work builds the valuation and the adjusted EBITDA schedule with its support, and prepares the materials a buyer asks for.

Questions owners ask

What is EBITDA, and why do buyers use it?

EBITDA is earnings before interest, taxes, depreciation, and amortization, a measure of operating profit before financing and accounting choices. Buyers adjust it for items such as owner pay and one-time costs, then price the business from the adjusted figure. How to calculate an EBITDA multiple explains what a buyer does with it.

Does a larger company always get a better offer?

No. Size helps with the number of buyers who will call. The offer still depends on earnings quality, how well the company runs without you, and how the buyer expects to grow it.